Pop-Up Retail Strategies in Omnichannel Context Pop-Up Retail Strategies in Omnichannel Context

Pop-up Retail Strategies in Omnichannel Context Pop-up Retail Strategies in Omnichannel Context Hong Yu, Sean Sedlezky, Ken Wong, Tony Hernandez, Pauline Larsen, and Gay Stephenson Ryerson University TORONTO Pop-up Retail Strategies in Omnichannel Context by Ryerson University is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted. Contents Part 1: Pop-Up Retail Basics Chapter 1: History of Pop-Up Retail 2 Chapter 2: Formats and Functions of Pop-Up Shops 18 Chapter 3: Omni-Channel Pop-Up Shops 33 Part 2: Pop-Up Shops and Stakeholders Chapter 4: Stakeholders of Pop-Up Retail Operations 43 Chapter 5: Consumer Segments and Psychographics 55 Chapter 6: The Role of Pop-Up Shops in Community Development 75 Part 3: Practices and Strategies for Pop-Up Retailing - Primary Activities Chapter 7: Location, Location, Location 91 Chapter 8: Design, Layout and Display 103 Chapter 9: Point-of-Sale (POS) Systems 117 Chapter 10: Merchandising, Inventory and Logistics 128 Chapter 11: Marketing 145 Part 4: Practices and Strategies for Pop-Up Retailing - Support Activities Chapter 12: Budget and Finance 172 Chapter 13: Legal Considerations of a Pop-Up Operation 186 Chapter 14: Human Resources Management 209 Chapter 15: Technology and Innovations in Pop-up Retail Operations 219 Part 5: Measuring Success of Pop-Up Retail Operations Chapter 16: Pop-up Analytics and Measurements 233 Part 1: Pop-Up Retail Basics The first three chapters of this textbook will introduce readers to a history of pop-up shops, formats and functions to consider, along with omni-channel strategies for success. 1 Chapter 1: History of Pop-Up Retail Chapter Overview Temporary stores that create opportunities for customers to engage with a brand have been “popping up” in a variety of places for many years. Otherwise known as pop-up shops, this short-term retail format has a history that dates back many centuries to the earliest known travelling merchants. More recently however, starting in the early 2000s and growing significantly in popularity since, retailers and brand manufacturers have employed the use of temporary locations as part of an omni-channel strategy to build awareness, launch new products and increase sales by appealing to new customers. Pop-Up Shop: a temporary location designed to engage customers directly for the purposes of generating brand awareness, selling seasonal goods, testing new products and markets or responding to local needs. Academic research with a focus on pop-up retail has explored how the format may impact consumer attitudes and experiences with a brand. This chapter will introduce some of the earliest examples and newest concepts of pop- ups. Learning Objectives Upon completion of the chapter, readers will be able to: • Identify the historical uses of pop-ups. • Explain how pop-up shops have evolved to serve different purposes. • Name potential uses of pop-up operations in other industries. • Give examples of event-based pop-up practices. 2 3 • POP-UP RETAIL STRATEGIES Setting the Context VIDEO The following video helps to offer some context to how pop-ups have changed over time with a hypothetical entrepreneur planning his business first as a traveling merchant with a horse-drawn wagon, to the same individual setting up a booth at a music festival, to the modern-day concept of a temporary store-within-a-store. A YouTube element has been excluded from this version of the text. You can view it online here: https://pressbooks.library.ryerson.ca/popup/?p=20 CHAPTER 1: HISTORY OF POP-UP RETAIL • 4 1. Historical Uses for Pop-Ups Figure 1.1 Travelling merchant in Asia (source: Pexels.com) 1.1 Traveling Merchants One of the earliest forms of retail trade involved caravans and travelling merchants who would regularly “pop up” in various locations, bringing with them exotic products such as spices, carpets, fashion and more to new markets across the continent European. Similarly, during the industrialization of England, John Lie suggests that travelling merchants were important in expanding trade to wider geographic areas than would otherwise be served by traditional markets. He summarizes from Rowlands (1975) and Spufford (1984) that “…many of the leading industries of the Industrial Revolution, such as cloth and iron, relied on travelling merchants to find and create their ‘market’…”1. These merchants would visit different locations on a seasonal or periodic basis, expanding both the demand and distribution for goods that were not regularly available to most customers. For many years, traditional periodic markets around the globe have provided an opportunity for travelling merchants and part-time entrepreneurs alike to sell everything from fresh seafood and seasonal produce to clothes and housewares. Often located in developing or rural areas, these markets have offered merchants a relatively low-cost way to visit and rent space in a new geographic area each day of the week, introducing new products and innovations to consumers.2 5 • POP-UP RETAIL STRATEGIES Periodic Market: a market that operates in a consistent location, typically for one day per week and often with a mix of seasonal and regular vendors, allowing farmers or travelling merchants to exchange goods that may not be otherwise available locally. 1.2 Farmers’ Markets The farmers’ market is similar to an ongoing periodic market but typically operates in relation to the growing season of a geographic region. Providing an outlet for independent growers and producers of food items to sell directly to consumers, these markets may open for one day a week through the summer and fall with a combination of regular and short-term vendors in a dedicated area on a street, in a parking lot or at parks and open spaces such as rural fairgrounds. Shoppers can expect to find staple items including carrots, lettuce and tomatoes throughout the season, while other items such as blueberries, cranberries and squash with shorter harvesting seasons may be available exclusively during select months. Figure 1.2 Entrance to a Farmer’s Market In a study about the history of farmers’ markets in Canada, Michael Basil identified three distinct eras3. The first of these saw the introduction of European-style markets following immigration patterns during the 1800s through the turn of the century. A decline in farmers’ markets corresponded to a rise in industrial farming along with a CHAPTER 1: HISTORY OF POP-UP RETAIL • 6 growing dependence by consumers on general stores and supermarkets. However, a third era from 1970 onward began with the increasing popularity of consumers focused on the environment and eat-local movements. Today, farmers’ markets are often organized with support from the local chamber of commerce, business improvement area or community groups and serve as a temporary location for retailers with both traditional and innovative products. However, recent shifts in consumer interests toward experiences over products alone may help to re-shape some of the offerings at these markets. In a US survey of 19 to 29 year-olds, the majority expressed an interest in seeing festival-like events at farmers’ markets. “87 percent would like to see cooking demonstrations…74 percent would like kid’s events… Over half of the respondents (61%) would like to see contests, such as food-eating and raffles.”4 Farmers’ markets are already positioned to take advantage of green, organic and local food sourcing trends, but would do well to incorporate unique and constantly changing experiential events into the mix with an eye to attracting young adults along with traditional customers. 1.3 Seasonal Businesses Figure 1.3 Halloween Pop Up Shop Retailers of seasonal products such as calendars or holiday items for Valentine’s Day, Halloween and the like will pop up each year in vacant shopping mall spaces, street front stores, kiosks or at events. In many ways, these pop- up stores operate as traditional brick and mortar retailers but for a limited time frame of a few weeks or months. 7 • POP-UP RETAIL STRATEGIES They may return to the same markets each year, but source new locations each time based on the availability of vacant spaces. Spirit Halloween offers a good example of a seasonal pop-up retail format. Founded in 1983 and having grown to over 1,100 locations across Canada and the US, these stores operate from August to November each year and maintain a permanent website to sell costumes, decorations and accessories.5 Halloween is one of several important events for traditional retailers that presents great opportunities for entrepreneurs and pop-up shops. Although this type of business is designed to continue each year on an ongoing basis, new temporary locations may be used each time based on the availability of vacant street front stores, mall space, and other appropriate sites in each market during the season. Did You Know? • Statistics Canada reported that candy sales for October 2016 were $66.4 million higher than the monthly average.6 • That same year, a total of 63,945 tonnes of pumpkins were sold for a total of $21.3 million, many for use as Jack-o-lanterns and holiday treats. • The total value of Halloween-related sales is almost $1 billion annually according to the Retail Council of Canada.7 CHAPTER 1: HISTORY OF POP-UP RETAIL • 8 Figure 1.4 Seasonal pumpkin market in a Montreal parking lot (CC-BY Sean Sedlezky, 2013) 2. The Evolution of Pop-Up Shops 2.1 A New Channel for Direct Engagement With Consumers While many early examples of retailers “popping up” were temporary by virtue of the markets or seasons in which they were operating (e.g., periodic markets, holiday-themed products, etc.), the pop-up format has evolved to include a greater focus on the customer experience.

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